Discovery climate-change position

Climate change is one of the key risks facing business and society. Sustained temperature increases have various negative consequences, including a growing number of extreme weather events. This creates a range of material risks for insurers. These risks include not only worsening health outcomes and the failure of health infrastructure, but also rapid changes in market preferences, energy policies and financial-sector regulations, among others.

In 2015, nearly 200 governments signed a treaty on climate change (known as the Paris Agreement). In terms of the agreement, these governments will act to keep the increase in global average temperature to below 2 °C and they will pursue efforts to limit this to 1.5 °C. Achieving this requires global emissions to drop to net zero by mid-century - an undertaking that will demand collaboration from all sectors of society.

An increasing number of governments are committing to net-zero emissions; however, there is still a large gap between current targets and what is needed to meet the goals of the Paris Agreement. In addition, there is growing pressure from both society and investors for companies to align their business models with a net-zero future, and to integrate climate change into their post-pandemic recovery. This provides an opportunity to address both health- and climate-related challenges, given their inter-dependencies. The World Health Organization estimates that by reducing environmental and social risk factors, nearly a quarter of the global health burden can be prevented. Creating healthy environments for populations is one of the most effective ways to reduce long-term health impacts from climate change and increase resilience to climate change.

As a global financial-services organisation, Discovery recognises that its ability to do business is fundamentally linked to the sustainable wellbeing of the communities in which we operate. Our core purpose of making people healthier and enhancing and protecting their lives is aligned to the goal of maintaining an environment that enables and sustains good health. In addition, through our Shared-Value business model, we play a significant role in influencing our clients' health and financial behaviour, and we share the value of this behaviour change with our clients and society. We have an opportunity to become part of the climate-change solution by extending the Shared-Value model into this space, while minimising our own impact.

This response is captured in two overarching goals for the short to medium term and the long term. These goals are enabled through three pillars, each with specific commitments*:

This strategy and its activities are aligned with the Group's broader approach to environmental, social and governance issues. More detail on this strategy will be shared later in 2021 and Discovery will follow the recommendations of the Task Force for Climate-related Financial Disclosures for reporting on progress against these targets.